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AMERICA ONLINE, INC. ACQUIRES JOHNSON-GRACE; TECHNOLOGY BRINGS RICH GRAPHICS AND SOUNDS TO AOL AND THE WEB; ENHANCES INTERACTIVE EXPERIENCE FOR MILLIONS OF CONSUMERS CONNECTING AT LOW SPEEDS

VIENNA, Va., Feb. 1 /PRNewswire/ -- America Online, Inc. (Nasdaq-NNM: AMER) today announced the acquisition of Johnson-Grace, leading developers of data compression technologies. The technologies of Johnson-Grace allow publishers to create more engaging interactive content that includes graphics, streaming audio and slide shows. AOL intends to make the technology widely available to service providers and tools developers thereby allowing millions of consumers to enjoy rich sound and graphics both on the Web and commercial services at connection speeds of 14.4 kbps or lower.

"The success of our medium depends on being able to deliver an ever- more engaging set of services that are fast and easy-to use," said Steve Case, Chairman and CEO. "The technology of Johnson-Grace will create an enhanced experience for content partners who want to enrich their publishing capabilities, and for a new class of consumers who can, for the first time, enjoy a rich interactive experience without frustrating and costly delays previously experienced by users at lower speeds."

Case added, "Despite all the talk about a bandwidth explosion driven by ISDN and cable modems, the reality is that the vast majority of consumers now connect at 14.4 and over the next 12 -24 months will connect at 28.8, so compression is critical to creating an engaging interactive experience for a mass consumer audience."

AOL plans to broadly license the J-G technology, known as ART, to strategic partners and content developers across the Internet. Additionally a Johnson- Grace SDK (Software Developers Kit) will be available to software application companies that wish to include support for the ART format in their applications.

ART will work within Internet scripting languages including HTML and VRML, offering information providers a single tool for compressing media
for the Web and AOL. Instead of dealing with different compression formats for photos, graphics, streaming audio and MIDI, developers can use this single format will produce highly compressed files that will play on AOL and Internet websites at very low bandwidth. Plus the fidelity of the decompressed audio and pictures is superior to any other
available technology. The ART format will also support RPictureshows,S collages of pictures and graphics synchronized to a streaming audio track. With picture shows, users could get the nightly news with photos and commentary from Bosnia, or visit an online store, talking to sales people and seeing products as they shop.


"We're thrilled to be joining forces with America Online," said Christopher Grace, co-CEO of Johnson-Grace. "The combination of America Online and Johnson-Grace will result in a new class of technology and services designed to empower AOL's partners to expand into more innovative publishing, while opening up access to broader base of consumers."

"Our combined engineering teams will continue to develop and integrate new technologies that make the online medium more engaging and easy to use," said Steve Johnson, co-CEO of Johnson-Grace.

Case added, "Additionally, we are excited to add the Johnson-Grace employees to the AOL family who include many of the industryUs leading experts on compression technology and can help lead the way in making online services and the Internet more easily accessible to consumers."

Johnson-Grace, a privately held company, has been a technology partner of AOL's since 1994 when it began providing the core compression technologies used to deliver the AOL service. As a result of this alliance, AOL acquired a 10% stake. Headquartered in Newport Beach, CA, Johnson-Grace was founded in March 1992. JG has 70 employees.

America Online acquired Johnson-Grace for approximately 1.6 million shares in stock. The merger will be effected as a tax-free exchange and accounted for as a pooling of interests.

America Online, Inc., (Nasdaq symbol: AMER), based in Vienna, Va., is the largest and fastest growing provider of online services in the world with more than 4.5 million subscribers. AOL offers its subscribers a wide variety of services including electronic mail, conferencing, software, computing support, interactive magazines and newspapers and online classes, as well as easy and affordable access to services of the Internet. AOL has a global workforce consisting of 4000 people. Founded in 1985, AOL has established strategic alliances with dozens of companies, including Capital Cities/ABC, Viacom, Bertelsmann, Hachette, IBM, Compaq and American Express. Personal computer owners can obtain America Online software at major retailers and bookstores, or by calling 800-827-6364.
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/CONTACT: Pam McGraw of America Online, 703-556-3746/

(AMER)

CO: America Online, Inc.; Johnson-Grace ST: Virginia IN: CPR SU:

DC -- DCTH043 -- 5193 02/01/96 16:07 EST
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Publication:PR Newswire
Date:Feb 1, 1996
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